The new emerging markets epoch
Why emerging markets?
Jaap van der Hart
The left-hand chart shows the valuation spread of the MSCI World Index vs. the MSCI Emerging Market Index. The valuation spread is based on four bottom-up-calculated multiples (price-to-book, price-to-earnings, price-to-cashflow, and price-to-dividend). For each multiple the valuation ratio of the MSCI Emerging Markets Index is divided by the same valuation ratio for the MSCI World Index. The right-hand chart shows the five-year rolling standard deviation in MSCI Emerging Market Index and the MSCI World Index. Source: Robeco, MSCI, August 2023.
Our multi-decade track record in emerging markets investing has been built on the foundations of proprietary, award-winning research. We find an edge at region, country or sector level, and rely on our research analysts and sustainability experts to find the best opportunities.
Emerging markets are the most fertile pastures for value hunters and we manage our strategies with a value tilt. Turnaround plays and companies with embedded competitive advantage that isn’t yet priced-in by domestic or international investors can be found with rigorous research and local knowledge.
Quantitative solutions exploit deeply entrenched cognitive biases that afflict investors. Our disciplined, transparent and systematic approach keeps emotions at bay and takes advantage of market inefficiencies driven by human behavior. This is how we deliver superior risk-adjusted performance for our clients in the long run. In addition, our quant strategies allow for extensive customization along various risk, return and sustainability dimensions.
Robeco has long been a leader in SI, taking sustainability into consideration since 2001 and integrating ESG factors since 2011. Assessing existing and potential ESG risks and opportunities helps us make better-informed investment decisions.